Wanted: used cars and lots of them.
The COVID-19 pandemic has created a huge demand for them and dealerships across the nation, including Citrus County, are willing to pay top dollar.
There’s probably never been a better time to either trade in or sell your used vehicle. The average value for a traded-in vehicle rose by $2,000 from June to July, according to Edmunds’ sales data, marking a 16% month-over-month increase.
The average price for all used vehicles in July was $21,558, up $708 from June, Edmunds said.
“The used market is experiencing a dramatic recovery,” said Jessica Caldwell, with Edmunds. “Used vehicles were sitting almost untouched at the start of the pandemic, and now they’re practically flying off dealer lots.”
But time is of the essence, she said, because there’s no guarantee the hot market will continue for long.
Factory shutdowns or slowdowns related to the COVID-19 pandemic have limited the number of new 2021 vehicles arriving at dealerships, blunting dealerships’ need to offer big inventory-clearing sales. At the same time, there’s an increasing trend of consumers looking to save money by purchasing a used vehicle.
As such, dealerships are hungry for used cars that they can turn around and sell.
Pandemic hasn’t slowed customer traffic
“(The lack of new-car inventory) really bolstered the used-car market something fierce,” said Steve Lamb, president of Crystal Automotive, Motorcycle & Tractor Group.
And in March, April and May, used-car values accomplished something not normally seen: they appreciated instead of depreciated, he said.
Except for Chevrolets, Lamb said he’s finally getting more new cars on his lots and he’s at least a couple months away from getting up to normal inventory levels.
Lamb said people are not afraid to come to his Citrus and Hernando county dealerships. Pandemic fears seem to be higher in metropolitan areas, he said.
David Maus, owner of the Nissan dealership in Homosassa, said he’s still got plenty of new cars to sell. But for those who want used cars, the time was never better.
“Their used cars are worth more money today than they’ve ever been but right now, we can’t get enough of them,” Maus said.
And with interest rates so low, it makes transactions even more attractive, he said.
“The manufacturers can’t produce (new cars) at the speed they usually do so there is not as much pressure from them to sell them as fast as there has been in the past,” Maus said.
Maus said customer traffic is down somewhat due to the pandemic. However, he said his staff is wearing masks and doing what they can do to instill safety.
“We put their mind at ease,” Maus said. “(But) I don’t see the fear anymore.”
Edmunds analysts took a look at all 2017 model year vehicles traded in during July and determined their respective retained values by comparing the average trade-in price of each model against its average original manufacturer’s suggested retail price (MSRP).
They found midsize, heavy-duty and large trucks made up seven of the top 10 vehicles with the greatest overall retained value.
Toyota Tacoma clinched the No. 1 spot, commanding an average trade-in price of $26,766, or 75% of its original MSRP. The Ford F-350 Super Duty came in second, generating an average trade-in price of $49,174, or 74% of the vehicle’s original MSRP.
“The trade-in values we’re seeing for three-year-old vehicles certainly dispel the myth of cars losing half their value the moment you drive them off the lot,” said Ivan Drury, with Edmunds.
Market is correcting itself
Bill Buckner, new-vehicle sales manager at Nick Nicholas Ford, said people seeking a great value on their trades should take advantage of the current climate soon because new cars are starting to come in and a more-normal situation is expected in about 60 days.
“Vehicles just started rolling in about four weeks ago,” Buckner said. “We’re now getting a regular flow of inventory.”
He said new-car sales had been off about 5% from last year due to the pandemic. Factories had shut down for almost two months and that created a “pipeline logistics failure,” he said.
“The steady flow of inventory from the factories to the dealers is a very well-oiled machine,” Buckner said. “When that gets disrupted, it has a causal effect on both new and used cars.”
The situation is starting to right itself.
”From an inventory standpoint, it’s correcting itself right now and probably within the next 60 days, inventory flow for new vehicles will be corrected,” he said.
Buckner said the dealership, which has been there since 1981, has taken several precautions to keep the environment safe: Plexiglas has been installed and hand sanitizers can be found throughout the dealership. The vehicles are sanitized as well. Staff have masks available and picnic tables are strategically placed outside for those not wanting to enter the dealership.
“We’re happy to pick up and deliver from a person’s home if they request that as well,” Buckner said.